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Seminar by R Mohan

Seminar on ‘Finance Commissions and Federal Fiscal Relations— An Analysis from 11th to 14th Finance Commissions’

A seminar on ‘Finance Commissions and Federal Fiscal Relations— An Analysis from 11th to 14th Finance Commissions,’ was held at the Joan Robinson hall on 12 October, 2018. The seminar was presented by Mr R Mohan, Visiting Fellow at the Centre and Member, Kerala Public Expenditure Review Committee.

Abstract: The paper proposes to analyse the vertical fiscal imbalances between the centre and the States in India, especially in the context of monitiorable fiscal reforms, which have been an important part of the Terms of Reference and recommendations of the Finance Commissions since the 11th. The period covered is 2000-01 to 2018-19. The study finds that the conditionalities imposed by the Finance Commissions has resulted in asymmetric burden of fiscal consolidation falling on the States via-a-vis the centre . This would be further exacerbated if the recommendations of the Fiscal Responsibility and Budget Management (FRBM) Review Committee (2017) are implemented. The study finds that vertical fiscal imbalances between the centre and the States have worsened during the last two decadal period. The aspect sought to be highlighted is that despite degree of political centralisation coming down during the 1990s and first decade of 2000s, fiscal centralisation has gathered strength.